Scrutinizing Developments in Texas Appellate Law

Apr 27, 2018

This morning, the Supreme Court of Texas issued 10 opinions. Nine were in argued cases and one was a per curiam opinion. The Court continues to make progress toward deciding all of the argued cases this term. There are now 30 argued cases that have not been decided. Not surprisingly, the bulk of those (20) are from the February and March argument sittings. The Court has 1 remaining case from the October sitting, 1 from November, 3 from December, and 5 from January.

Given the volume of opinions, I will post full summaries next week. Some of the issues decided this week are:

Apr 20, 2018

This morning, the Supreme Court of Texas issued one opinion in an argued case. The Court did not grant any new petitions. The opinion is the first authored by Justice Blacklock since he joined the Court in January.

No. 16-0786, Adams v. Starside Custom Builders, LLC — This case again presents issues about the application of the Texas Citizens Participation Act, Texas's anti-SLAAP statute. It arises from a dispute between a homeowner and the developer of his neighborhood. The developer ultimately sued the homeowner, asserting a number of claims, including defamation based on statements that the homeowner made on a website, a blog post, and an email. The trial court denied the homeowner's motion to dismiss under the TCPA. The court of appeals affirmed, reaching only the issue of whether the allegedly defamatory statements related to a matter of public concern. In a unanimous opinion by Justice Blacklock, the Supreme Court disagreed. The Court again emphasized the broad language used in the TCPA. Although the alleged statements did not mention the developer directly, the Supreme Court concluded that they did relate to the developer's services in the marketplace (which is a category of communications that is defined to be a matter of public concern in the TCPA). The communications mentioned the developer's predecessor and its current owner and CEO. Moreover, the Court noted that the developer itself had pleaded that these statements were, in effect, about the developer. The Court also noted that the alleged communications constituted statements about the "well-being of the community," another subject that is expressly defined by the TCPA as a matter of public concern. In reaching that issue, the Court rejected the developer's assertion that the homeowner had waived his argument about community well-being because it was not specifically included in his motion to dismiss. Instead, the Court emphasized that the court's focus should be on whether the statements relate to a matter of public concern, not on the specific statutory sections cited in the motion to dismiss. The Court therefore reversed the court of appeals' judgment and remanded the case to that court to consider whether the developer carried its burden to establish a prima facie case for each essential element of its defamation claim.

Apr 16, 2018

As promised, here are the summaries of the 10 opinions the Court issued on Friday. Six of the opinions are in argued cases, so the Court now has 41 remaining cases to decide. The decided cases were from October, November, December, and January. There is now one case left from the October argument sitting, three from the November sitting, five from the December sitting, and nine from January.

No. 14-0721, USAA Lloyds Co. v. Menchaca — As mentioned on Friday, the Court withdrew its opinion from last April and replaced it with a highly fractured set of opinions. The primary issue in this case is "whether the insured can recover policy benefits based on the insurer’s violation of the Texas Insurance Code even though the jury failed to find that the insurer failed to comply with its obligations under the policy." In the first opinion, the Court held that such a claim can be viable, and remanded the case for a new trial. On rehearing, the issue is the procedural effect of the Court's holding based on the questions submitted to the jury. Although no approach commands a majority, a majority of the justices agree that the case should be remanded for a new trial. Justice Boyd's plurality opinion announces the judgment of the Court and explains the disposition. Chief Justice Hecht filed a concurring opinion and Justice Green filed a dissenting opinion joined in its entirety by Justice Guzman and Justice Brown and joined in part by Chief Justice Hecht. That portion joined by Chief Justice Hecht, Justice Guzman, and Justice Brown is a plurality opinion. Justice Blacklock concurred in the judgment, but did not join any opinion. And Justice Johnson did not participate in the decision. Clear as mud? Good.

No. 15-0155, Endeavor Energy Resources, L.P. v. Discovery Operating, Inc. — This is the first of two cases addressing retained-acreage clauses in oil and gas leases. The clause at issue in this case provides that after the primary term, even if the lease is not held by production, the lease does not terminate as to "certain lands within certain governmental proration units 'assigned to' a producing well." In a unanimous opinion by Justice Boyd, the Court noted that retained-acreage clauses "come in many different shapes, sizes, and forms" and must be construed in light of the regulatory context and specific lease language. Applying those principles, the Court concluded that the clause at issue maintained the lease only as to the specific acreage assigned to the wells in plats filed with the Railroad Commission.

No. 15-0935, XOG Operating, LLC v. Chesapeake Exploration, LP — This is the second retained acreage case. In a unanimous opinion by Justice Hecht, the Court applied the principles articulated in Endeavor Energy and held that a clause that retains acreage “included within the proration unit for each well… prescribed by field rules” preserves the lease as to acreage set by field rules, not acreage assigned by the operator.

No. 16-0107, Hill v. Shamoun & Norman, LLP — In this attorney-client dispute, the attorney claimed he had an oral contingency-fee agreement with his client. Because oral contingency-fee agreements are not enforceable, the attorney sought to recover under quantum meruit, but argued that the fee should be the percentage from the oral contingency-fee agreement. In a unanimous opinion by Justice Green, the Court held that even though the oral contingency-fee agreement is not enforceable, the attorney can still seek to recover under quantum meruit. But the Court held that the expert testimony about the amount of the quantum meruit fee was legally insufficient because the expert simply opined that the fee should be the percentage from the unenforceable contingency-fee agreement. Because there was some evidence of the reasonable value of the attorney's services, the Court remanded the case for a new trial on the quantum meruit theory.

No. 16-0120, Painter v. Amerimex Drilling I, Ltd. — In this personal injury case, an employee of respondent Amerimex Drilling was driving himself and other employees from the drilling site to a bunkhouse after their shift. The driver fell asleep and the vehicle rolled. The issue was whether the employer can be vicariously liable for the conduct of the driver. The trial court granted summary judgment in favor of the employer and the court of appeals affirmed. The primary issue on appeal was whether the plaintiffs were required to show that the employer controlled the driver's conduct during the trip as part of the respondeat superior analysis. In an opinion by Justice Lehrmann (joined by Chief Justice Hecht, Justice Johnson, Justice Guzman, Justice Boyd, and Justice Devine), the Court held that the right-to-control issue should be limited to cases involving independent contractors. The Court concluded that once there is sufficient evidence of control to find an employer-employee relationship (which the Court says was conceded here), then there is no reason to re-evaluate the right of control on a task-by-task basis. The court then concluded there was some evidence that the driver was acting within the course and scope of his employment when the accident occurred, precluding summary judgment. Justice Green filed a dissenting opinion (joined by Justice Brown). The dissenters would have held that even if the driver was an employee while at the drilling site, determining whether he was employee while driving the workers away from the site requires a right-to-control analysis. Essentially, the majority and dissent disagree about whether employment is determined on a task-by-task basis. The dissent argues that the driver could be an employee while at the drill site, but an independent contractor while driving the other workers away from the site after their shift. (Justice Blacklock did not participate in the decision.)

No. 16-0498, Jefferson County, Texas v. Jefferson County Constables Association — In this employment dispute, the issue is whether deputy constables are "police officers" with the right to enter into collective bargaining agreements under Chapter 174 of the Texas Local Government Code. If so, then the question is whether, in an arbitration under the bargaining agreement, the arbitrator exceeded his authority. In an opinion by Justice Lehrmann (joined by Chief Justice Hecht, Justice Green, Justice Guzman, Justice Devine, Justice Brown, and Justice Blacklock), the Court concluded that deputy constables are "police officers" within the meaning of Chapter 174 and held that the arbitrator did not exceed his authority. Justice Boyd filed a dissenting opinion (joined by Justice Johnson) concluding that deputy constables are not "police officers."

No. 16-0897, Neighborhood Centers, Inc. v. Walker — A former teacher at an open-enrollment charter school sued for relief under the Texas Whistleblower Act, claiming that she had been fired for reporting various issues to state agencies. The Whistleblower Act prohibits local governmental entities from retaliating against employees for reporting a violation of law by the employer. The issue in this case is whether an open-enrollment charter school is a local governmental entity for purposes of the Whistleblower Act. In an opinion by Chief Justice Hecht, the Court concluded that the Whistleblower Act does not apply to open-enrollment charter schools because the Texas Charter Schools Act does not include the Whistleblower Act among the statutes for which open-enrollment charter schools are considered governmental entities. Justice Johnson filed a concurring opinion to express concern that the Court's opinion includes some overly broad language about the Legislature's ability to grant governmental immunity. Justice Blacklock did not participate in the decision.

No. 17-0197, In re Elizondo — This mandamus proceeding addresses the application of the Court's decision in Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001), regarding finality of judgments. In Lehman the Court held that a judgment is final (1) if it includes language stating that it disposes of all claims and all parties and is final and appealable or (2) if it actually disposes of all claims and all parties. In this case, the trial court entered an order that mistakenly stated that it disposed of all claims and all parties and was final and appealable. More than 30 days later, the plaintiff filed a motion to amend the order, which the trial court granted. In a per curiam opinion, the Supreme Court conditionally granted the request for a writ of mandamus to vacate the amended order because the trial court had lost plenary power. Because the order said it disposed of all claims and all parties and was final, the Court held that the trial court lost plenary power 30 days after the order was entered. The Court rejected the plaintiff's invitation to revisit Lehmann, noting that the plaintiff had 30 days to read the order and determine that it erroneously stated that it disposed of all claims and all parties.

No. 17-0231, Schlumberger Tech. Corp. v. Pasko — In this personal injury case, the Court addressed the application of the discovery rule. The plaintiff was injured by exposure to caustic chemicals at an oil well site. Within two years of the exposure, he sued several defendants. More than two years after the exposure, he added claims against Schlumberger. He claimed that in addition to the immediate injuries caused by the chemicals, he had also developed cancer. The trial court granted summary judgment based on the statute of limitations. The court of appeals reversed, applying the concept of "latent occupational disease." In a per curiam opinion, the Supreme Court held that the court of appeals erred in applying the "latent occupational disease" framework because the initial exposure caused immediate injuries and the framework applies only where the plaintiff does not and cannot immediately know of the injury or its cause. Under the transactional approach to accrual, the fact that the cancer was diagnosed later does not change the result. The Court also held that the evidence conclusively established that, on the day the injury occurred, the plaintiff was aware of Schlumberger's involvement. Therefore, the Court rendered judgment that the claims against Schlumberger are time-barred.

No. 17-0395, In re Garza — This mandamus petition arises from a discovery sanction in a personal injury case pending in Jim Wells County. When the defendant sought discovery from some of the plaintiffs' medical providers, the plaintiff sought a protective order, but that relief was denied. The medical providers are not parties to the underlying case and did not participate in the hearing on the plaintiffs' motion for protection. When the defendant served subpoenas on the medical providers in Bexar County, the providers filed their own motion for protection, which the Bexar County court granted. The court in Jim Wells County then granted a motion to exclude any testimony by those medical providers. In a per curiam opinion, the Supreme Court granted mandamus relief, finding that the trial court abused its discretion in excluding the evidence because the medical providers simply exercised their rights to seek protection and there was no evidence that the plaintiff was involved in the providers' refusal to produce records.

Apr 13, 2018

This morning, the Supreme Court of Texas issued opinions in six argued cases. The Court also issued an opinion on rehearing in a much-watched insurance case from last term and issued three per curiam opinions.

The opinion on rehearing in USAA Lloyds Co. v. Menchaca, No. 14-0721, produced a highly fractured set of opinions about the procedural effect of the Court’s holdings, but those holdings and the ultimate disposition (reverse and remand for a new trial) remain the same.

For an idea about just how fractured the opinions are, here is the description of the various opinions from the order list:

The other issues addressed this morning include retained-acreage clauses in oil and gas leases, recovery of quantum merit attorney fees in lieu of a written contingency fee agreement, whether an employee was acting in the course and scope of his employment when driving from a drilling site, application of the whistleblower act to employees of charter schools, effect of finality language in a judgment, the discovery rule, and discovery sanctions.

Because I am writing this post standing in line for the tram tour at NASA Houston on a school field trip, I will post more complete summaries of the opinions next week.

Apr 09, 2018

In a memorandum opinion issued last week, the Dallas Court of Appeals again highlighted an error-preservation trap for the unwary and signaled its intent to keep enforcing the rule until someone gets it reversed en banc or by the Supreme Court.

The issue stems from a 1990 case, Brooks v. Sherry Lane Nat’l Bank, 788 S.W.2d 874, 878 (Tex. App.—Dallas 1990, no writ), in which the court refused to consider portions of the appellant's summary-judgment evidence that had been excluded by the trial court because the appellant did not object to the trial court's exclusion of that evidence. The court held:

We also note that the record contains no objection by Brooks protesting the striking of her pleading and affidavit. By failing to allege that the trial court acted erroneously, appellant has waived any error in connection with this action.

This is an odd error-preservation rule in that it requires a party to object to the court's ruling on the other side's objection. Usually, offering the evidence is sufficient to preserve error if the court excludes it.

In the opinion issued last Friday, the Dallas Court of Appeals panel noted the criticism of the rule but reiterated that it is bound by this rule until it is reversed by the court sitting en banc or by the Supreme Court. DuBois v. Martin Luther King, Jr., Family Clinic, No. 05-16-01460-CV, slip op. at 7 (Tex. App.—Dallas Apr. 6, 2018, no pet. h.) (mem. op.).

Until that happens, if your case is in the jurisdiction of the Dallas Court of Appeals, be sure to object to an order granting the other side's objections to your summary-judgment evidence. And, because this latest memorandum opinion at least suggests that some members of the court may be open to reconsidering the rule en banc in the right case, keep an eye out for an opportunity to seek en banc review of this rule or to take it up to the Supreme Court.

Apr 06, 2018

In its weekly orders this morning, the Supreme Court of Texas issued opinions in two argued cases. The Court did not grant any new petitions for review. With these two opinions, the Court now has 47 cases that have been argued this term, but not yet decided. Thus, we will see a rush of opinions over the next three months if the Court is going to continue its recent trend of deciding all of the argued cases in a term before the summer break.

One of the opinions issued this morning was the last remaining case from the September 2017 argument sitting. The other was argued in December. The Court has 2 cases left from the October argument sitting, 5 from the November sitting, and 6 from the December sitting. Not surprisingly, the more recent sittings account for the bulk of the undecided cases (11 from January, 9 from the early February sitting, 11 from the late February/early March sitting, and all 3 from the late-added argument date on March 20).

Cause No. 16-0244, Alamo Heights Indep. Sch. Dist. v. Clark — In this employment retaliation case against a school district, there were two primary issues: (1) whether the plaintiff presented sufficient evidence to raise an inference of gender-motivated discrimination and (2) whether the plaintiff carried her burden to invoke the waiver of governmental immunity in the Texas Commission on Human Rights Act. In an opinion by Justice Guzman (joined by Chief Justice Hecht, Justice Green, Justice Johnson, Justice Devine, and Justice Brown), the Court concluded that the evidence did not raise an inference of gender-motivated discrimination and that the plaintiff did not carry her burden to invoke the immunity waiver. The Court therefore rendered judgment that the plaintiff take nothing. Justice Boyd dissented, joined by Justice Lehrmann. Justice Blacklock did not participate in the decision.

On the first issue, the primary dispute between the majority and the dissent centers on what it means to view the evidence in the light most favorable to the plaintiff. The alleged harassment was perpetrated by one female teacher against another female teacher. Both the majority and the dissent agree that the plaintiff is required to present enough evidence to raise an inference that the alleged harassment was "because of" the plaintiff's gender. The majority concluded that the contextual evidence (which the majority reasoned it could not disregard under City of Keller v. Wilson) precluded an inference that the alleged harassment was gender based because it revealed motivations for the conduct that were not gender related. The dissent would have held that, even in light of the contextual evidence, a reasonable jury could conclude that the alleged harassment was "because of" the plaintiff's gender.

On the second issue, the majority and dissent agreed (on an issue of first impression) that all three steps of the McDonnell Douglas evidentiary framework apply to the jurisdictional inquiry. This holding means that plaintiffs asserting a retaliation claim against a governmental entity must show that the defendant's asserted non-discriminatory reasons for the adverse employment action are pretextual to bring the claim within the governmental-immunity waiver in the TCHRA. The majority assumes without deciding that the proper standard for determining whether the retaliation was the result of protected activity is "but-for" causation (because both parties argued for this standard). The dissent would have applied a "motivating factor" test, at least at the jurisdictional stage of the analysis. Again, the majority and dissent disagree about whether the evidence is sufficient to allow a reasonable jury to decide that the adverse actions were the result of the plaintiff's protected activity.

Cause No. 16-0651, Dudley Construction Ltd. et al. v. ACT Pipe & Supply, Inc. — There are two primary issues in this case: (1) whether an appellate cross-point must be labeled as a cross-point to be effective; and (2) whether attorney's fees are recoverable in a case under the Texas Construction Trust Fund Act ("CTFA"). The Court (in a unanimous opinion by Justice Brown) first concluded that a cross-point does not have to be specifically labeled to be effective. The Court reasoned that even though the argument was not specifically labeled as a cross-point, the appellee's brief in substance raised alternative arguments to support the trial court's grant of a JNOV. The Court held that requiring the argument to be specifically labeled as a "cross-point" would improperly elevate form over substance. On the second issue, the Court held that attorney's fees are not recoverable. The CTFA does not provide for recovery of attorney's fees. And the Court rejected the argument that fees are recoverable under Texas Civil Practice and Remedies Code section 38.001. The Court reasoned that just because a claim under the CTFA might also involve a contract, that is not enough to make it a claim that is subject to section 38.001. (Justice Blackrock did not participate in the decision.)